Trade deal with U.S. expected to spur Mexican e-commerce

MEXICO CITY (Reuters) – Mexico’s fledgling e-commerce market could get a lift from a trade agreement with the Trump administration that doubles the value of goods that can be imported tax-free from the United States, online businesses and experts said.

FILE PHOTO: The logo of the web service Amazon is pictured in this June 8, 2017 illustration photo. REUTERS/Carlos Jasso/Illustration/File Photo

Mexico and Washington reached a deal to revamp the North American Free Trade Agreement on Monday, but talks with Canada, the other country in the 1994 pact, are ongoing and could alter the terms.

The bilateral deal between the United States and its southern neighbor would see Mexico double its minimum duty-free shipment threshold, called the de minimis value, to $100, a step that should benefit both express delivery firms and online retailers such as Amazon.com Inc.

“It’s great for us as internet leaders,” said Enrique Culebro, head of Mexico’s internet association, which represents Amazon, Wal Mart de Mexico and various online services.

“We’re really optimistic about what this is going to mean for the country, especially for the digital economy,” he said.

The online market in Mexico, Latin America’s second-largest economy, was expected to be worth around $7 billion in 2018, according to market research firm Euromonitor International, though that figure represents a small fraction of total retail sales.

Months before the deal, the firm predicted the market would be worth $14 billion by 2022.

The $100 threshold is well below the $800 target the United States had originally pitched in President Donald Trump’s broader push to rework NAFTA.

But it will make it easier for Amazon and other online platforms to offer an array of products to Mexican consumers, and could see sales climb for U.S. specialty goods priced under $100, said Carlos Hermosillo, retail analyst with Mexican brokerage Actinver.

“This would most likely widen the appeal for the international marketplace,” he said.

E-commerce giant eBay Inc celebrated the move.

“Lowering trade barriers is critical to … creating more access to goods for buyers on a global basis,” Mike Dabbs, eBay’s senior director of government relations for the Americas, said in a statement.

E-commerce firm MercadoLibre said in a statement it is waiting to see a finalized deal but that it expects the higher limit to help smaller companies enter e-commerce.